| | | | | | | | |
| | CONTACTS: |
| | Investors |
| | Laura Rossi |
| | InvestorRelations@amerantbank.com |
| | (305) 460-8728 |
| | |
| | Media |
| | Victoria Verdeja |
| | MediaRelations@amerantbank.com |
| | (305) 441-5541 |
AMERANT REPORTS SECOND QUARTER 2023 RESULTS
Board of Directors Declares Quarterly Cash Dividend of $0.09 per Common Share
CORAL GABLES, FLORIDA, July 20, 2023. Amerant Bancorp Inc. (NASDAQ: AMTB) (the “Company” or “Amerant”) today reported net income attributable to the Company of $7.3 million in the second quarter of 2023, or $0.22 per diluted share, compared to net income attributable to the Company of $20.2 million, or $0.60 per diluted share, in the first quarter of 2023.
“Achieving strong organic deposit growth was a significant accomplishment this quarter” stated Jerry Plush, Chairman and CEO. “While elevated reserve coverage levels were needed related to a legacy NY based commercial real estate loan along with updated economic forecasts, we continued to show solid growth in pre-provision net revenue, driven primarily by a strong net interest margin. We remain keenly focused on driving profitable growth and achieving our goal of becoming the bank of choice in the markets we serve.”
•Total assets increased $24.2 million, or 0.3%, to $9.5 billion compared to 1Q23.
•Total gross loans increased $101.9 million, or 1.4%, to $7.22 billion compared to $7.12 billion in 1Q23.
•Cash and cash equivalents were $445.1 million, down $40.7 million, or 8.4%, compared to $485.8 million in 1Q23.
•Total deposits were $7.58 billion, up $292.8 million, or 4.0%, compared to $7.29 billion in 1Q23. Organic deposit growth in commercial, consumer and international banking was $432 million, which enabled reductions in brokered deposits and institutional deposits of $52 million and $136 million, respectively.
•Total advances from Federal Home Loan Bank (“FHLB”) were $770.0 million, down $282.0 million, or 26.8%, compared to $1.1 billion in 1Q23, the result of early repayments of $355 million in the quarter in connection with asset/liability management strategies. An additional $2.1 billion remained available from FHLB as of June 30, 2023.
•Average yield on loans increased to 6.79% in 2Q23, compared to 6.38% in 1Q23.
•Total non-performing assets increased to $67.4 million, up $18.7 million, or 38.3%, compared to $48.7 million as of 1Q23.
•The allowance for credit losses ("ACL") was $106.0 million, an increase of $21.6 million, or 25.6%, compared to $84.4 million as of 1Q23.
•Core deposits were $5.50 billion, up $140.6 million, or 2.6%, compared to $5.36 billion in 1Q23.
•Average cost of total deposits increased to 2.40% in 2Q23 compared to 1.91% in 1Q23.
•Loan to deposit ratio improved to 95.22% in 2Q23 compared to 97.64% in 1Q23.
•Assets Under Management and custody (“AUM”) totaled $2.15 billion, slightly up $39.9 million, or 1.9%, from $2.11 billion in 1Q23.
•Pre-provision net revenue (“PPNR”)(1) was $38.3 million in 2Q23, an increase of $1.1 million or 2.9%, compared to $37.2 million in 1Q23.
•Core Pre-Provision Net Revenue (“Core PPNR”)(1) was $39.2 million in 2Q23, up $2.1 million, or 5.6%, from $37.1 million in 1Q23.
•Net Interest Margin (“NIM”) was 3.83% in 2Q23 compared to 3.90% in 1Q23.
•Net Interest Income (“NII”) was $83.9 million, up $1.5 million, or 1.9%, from $82.3 million in 1Q23.
•Provision for credit losses was $29.1 million in 2Q23, up $17.4 million, or 148.5%, compared to $11.7 million in 1Q23. The provision for credit losses in 2Q23 was comprised of $15.7 million in connection with charge-offs and credit quality, $1.4 million related to loan growth and $12.0 million to reflect updated economic factors.
•Non-interest income was $26.6 million in 2Q23, up $7.3 million, or 37.6%, from $19.3 million in 1Q23. 2Q23 included $12.4 million in non-routine net gains.
•Non-interest expense was $72.5 million, up $7.8 million, or 12.0%, from $64.7 million in 1Q23. 2Q23 included $13.4 million in non-routine noninterest expenses.
•The efficiency ratio was 65.6% in 2Q23 compared to 63.7% in 1Q23.
•Return on average assets (“ROA”) was 0.31% in 2Q23 compared to 0.88% in 1Q23.
•Return on average equity (“ROE”) was 3.92% in 2Q23 compared to 11.15% in 1Q23.
Additional details on second quarter 2023 results can be found in Exhibits to this earnings release, and the earnings presentation available under the Investor Relations section of the Company’s website at https://investor.amerantbank.com.
On July 19, 2023, the Company’s board of directors declared a quarterly cash dividend of $0.09 per common share. The dividend is payable on August 31, 2023 to shareholders of record on August 15, 2023.
1 Non-GAAP measure, see “Non-GAAP Financial Measures” for more information and Exhibit 2 for a reconciliation to GAAP.
Second Quarter 2023 Earnings Conference Call
The Company will hold an earnings conference call on Friday, July 21, 2023 at 9:00 a.m. (Eastern Time) to discuss its second quarter 2023 results. The conference call and presentation materials can be accessed via webcast by logging on from the Investor Relations section of the Company’s website at https://investor.amerantbank.com. The online replay will remain available for approximately one month following the call through the above link.
About Amerant Bancorp Inc. (NASDAQ: AMTB)
Amerant Bancorp Inc. is a bank holding company headquartered in Coral Gables, Florida since 1979. The Company operates through its main subsidiary, Amerant Bank, N.A. (the “Bank”), as well as its other subsidiaries: Amerant Investments, Inc., Elant Bank and Trust Ltd., and Amerant Mortgage, LLC. The Company provides individuals and businesses in the U.S. with deposit, credit and wealth management services. The Bank, which has operated for over 40 years, is the largest community bank headquartered in Florida. The Bank operates 23 banking centers – 17 in South Florida and 6 in the Houston, Texas area, as well as an LPO in Tampa, Florida. For more information, visit investor.amerantbank.com.
FIS® and any associated brand names/logos are the trademarks of FIS and/or its affiliates.
Cautionary Notice Regarding Forward-Looking Statements
This press release contains “forward-looking statements” including statements with respect to the Company’s objectives, expectations and intentions and other statements that are not historical facts. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “point to,” “project,” “could,” “intend,” “target,” “goals,” “outlooks,” “modeled,” “dedicated,” “create,” and other similar words and expressions of the future.
Forward-looking statements, including those relating to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the Company’s actual results, performance, achievements, or financial condition to be materially different from future results, performance, achievements, or financial condition expressed or implied by such forward-looking statements. You should not rely on any forward-looking statements as predictions of future events. You should not expect us to update any forward-looking statements, except as required by law. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, together with those risks and uncertainties described in “Risk factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2022 filed on March 1, 2023 (the “Form 10-K”), our quarterly report on Form 10-Q for the quarter ended March 31, 2023 filed on May 2, 2023, and in our other filings with the U.S. Securities and Exchange Commission (the “SEC”), which are available at the SEC’s website www.sec.gov.
Interim Financial Information
Unaudited financial information as of and for interim periods, including the three and six month periods ended June 30, 2023 and 2022 and the three months ended March 31, 2023 and December 31, 2022, may not reflect our results of operations for our fiscal year ending, or financial condition, as of December 31, 2023, or any other period of time or date.
As previously disclosed in the Form 10-K, the Company adopted the new guidance on accounting for current expected credit losses on financial instruments (“CECL”) effective as of January 1, 2022. Quarterly amounts previously reported on our quarterly reports on Form 10-Q for the periods ended March 31, 2022, June 30, 2022 and September 30, 2022 do not reflect the adoption of CECL. In the fourth quarter of 2022, the Company recorded a provision for credit losses totaling $20.9 million, including $11.1 million related to the retroactive effect of adopting CECL for all previous quarterly periods in the year ended December 31, 2022, including loan growth and changes to macro-economic conditions during the period. Quarterly amounts included in the Form 10-K and this earnings release and accompanying presentation reflect the impacts of the adoption of CECL on each interim period of 2022. See the Form 10-K for more details on the adoption of CECL.
The following table shows changes to previously-reported amounts for the quarter ended December 31, 2022 versus the corresponding amounts reflecting the adoption of CECL in 2022:
| | | | | | | | | | | | | | | | | |
| |
| (in thousands, except per share amounts) | As Reported | | As Recast | | Changes |
| | | | | |
| Total interest income | $ | 113,374 | | | $ | 113,374 | | | $ | — | |
| Total interest expense | 31,196 | | | 31,196 | | | — | |
| Net interest income | 82,178 | | | 82,178 | | | — | |
| Provision for credit losses | 20,945 | | | 16,857 | | | (4,088) | |
| Net interest income after provision for credit losses | 61,233 | | | 65,321 | | | 4,088 | |
| Total noninterest income | 24,365 | | | 24,365 | | | — | |
| Total noninterest expense | 62,241 | | | 62,241 | | | — | |
| Income before income taxes | 23,357 | | | 27,445 | | | 4,088 | |
| Income tax expense | (4,746) | | | (5,627) | | | (881) | |
| Net income before attribution of noncontrolling interest | 18,611 | | | 21,818 | | | 3,207 | |
| Noncontrolling interest | (155) | | | (155) | | | — | |
| Net income attributable to Amerant Bancorp Inc. | $ | 18,766 | | | $ | 21,973 | | | $ | 3,207 | |
| Basic earnings per common share | $ | 0.56 | | | $ | 0.66 | | | $ | 0.10 | |
| Diluted earnings per common share | $ | 0.55 | | | $ | 0.65 | | | $ | 0.10 | |
| Cash dividends declared per common share | $ | 0.09 | | | $ | 0.09 | | | $ | — | |
Non-GAAP Financial Measures
The Company supplements its financial results that are determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”) with non-GAAP financial measures, such as “pre-provision net revenue (PPNR)”, “core pre-provision net revenue (Core PPNR)”, “core noninterest income”, “core noninterest expenses”, “core net income”, “core earnings per share (basic and diluted)”, “core return on assets (Core ROA)”, “core return on equity (Core ROE)”, “core efficiency ratio”, “tangible stockholders’ equity (book value) per common share”, “tangible common equity ratio, adjusted for unrealized losses on debt securities held to maturity”, and “tangible stockholders' equity (book value) per common share, adjusted for unrealized losses on debt securities held to maturity”. This supplemental information is not required by, or is not presented in accordance with GAAP. The Company refers to these financial measures and ratios as “non-GAAP financial measures” and they should not be considered in isolation or as a substitute for the GAAP measures presented herein.
We use certain non-GAAP financial measures, including those mentioned above, both to explain our results to shareholders and the investment community and in the internal evaluation and management of our businesses. Our management believes that these non-GAAP financial measures and the information they provide are useful to investors since these measures permit investors to view our performance using the same tools that our management uses to evaluate our past performance and prospects for future performance, especially in light of the additional costs we have incurred in connection with the Company’s restructuring activities that began in 2018 and continued in 2023, including the effect of non-core banking activities such as the sale of loans and securities and other repossessed assets, the valuation of securities, derivatives, loans held for sale and other real estate owned and repossessed assets, the early repayment of FHLB advances, impairment of investments, and other non-routine actions intended to improve customer service and operating performance. While we believe that these non-GAAP financial measures are useful in evaluating our performance, this information should be considered as supplemental and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ from similar measures presented by other companies.
Exhibit 2 reconciles these non-GAAP financial measures to reported results.
Exhibit 1- Selected Financial Information
The following table sets forth selected financial information derived from our interim unaudited and annual audited consolidated financial statements.
| | | | | | | | | | | | | | | | | | | | | |
(in thousands) | June 30, 2023 | | March 31, 2023 | | December 31, 2022 | | | | |
| Consolidated Balance Sheets | | | | | (audited) |
| Total assets | $ | 9,519,526 | | $ | 9,495,302 | | $ | 9,127,804 | | | | |
| Total investments | 1,315,303 | | 1,347,697 | | 1,366,680 | | | | |
| | | | | | | | | |
| Total gross loans (1) | 7,216,958 | | 7,115,035 | | 6,919,632 | | | | |
| Allowance for credit losses | 105,956 | | 84,361 | | 83,500 | | | | |
| Total deposits | 7,579,571 | | 7,286,726 | | 7,044,199 | | | | |
| Core deposits (2) | 5,498,017 | | 5,357,386 | | 5,315,944 | | | | |
| Advances from the Federal Home Loan Bank | 770,000 | | 1,052,012 | | 906,486 | | | | |
| Senior notes | 59,368 | | 59,289 | | 59,210 | | | | |
| Subordinated notes | 29,369 | | 29,326 | | 29,284 | | | | |
| Junior subordinated debentures | 64,178 | | 64,178 | | 64,178 | | | | |
| Stockholders' equity (3)(4) | 720,956 | | 729,056 | | 705,726 | | | | |
Assets under management and custody (5) | 2,147,465 | | 2,107,603 | | 1,995,666 | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | | |
(in thousands, except percentages, share data and per share amounts) | June 30, 2023 | | March 31, 2023 | | December 31, 2022 | | | | | | | | | |
| | | | | | | | | | | | | | |
Consolidated Results of Operations | | | | | | | | | | | | | | |
| Net interest income | $ | 83,877 | | $ | 82,333 | | $ | 82,178 | | | | | | | | | |
| Provision for credit losses (6) | 29,077 | | 11,700 | | 16,857 | | | | | | | | | |
| Noninterest income | 26,619 | | 19,343 | | 24,365 | | | | | | | | | |
| Noninterest expense | 72,500 | | 64,733 | | 62,241 | | | | | | | | | |
| Net income attributable to Amerant Bancorp Inc. (6) (7) | 7,308 | | 20,186 | | 21,973 | | | | | | | | | |
| Effective income tax rate (6) | 21.00% | | 21.00% | | 20.50% | | | | | | | | | |
| | | | | | | | | | | | | | |
Common Share Data | | | | | | | | | | | | | | |
| Stockholders' book value per common share | $ | 21.37 | | $ | 21.56 | | $ | 20.87 | | | | | | | | | |
| Tangible stockholders' equity (book value) per common share (8) | $ | 20.66 | | $ | 20.84 | | $ | 20.19 | | | | | | | | | |
| Tangible stockholders' equity (book value) per common share, adjusted for unrealized losses on debt securities held to maturity (8) | $ | 20.11 | | $ | 20.38 | | $ | 19.65 | | | | | | | | | |
| Basic earnings per common share (6) | $ | 0.22 | | $ | 0.60 | | $ | 0.66 | | | | | | | | | |
| Diluted earnings per common share (6)(9) | $ | 0.22 | | $ | 0.60 | | $ | 0.65 | | | | | | | | | |
| Basic weighted average shares outstanding | 33,564,770 | | 33,559,718 | | 33,496,096 | | | | | | | | | |
| Diluted weighted average shares outstanding (9) | 33,717,702 | | 33,855,994 | | 33,813,593 | | | | | | | | | |
| Cash dividend declared per common share (4) | $ | 0.09 | | $ | 0.09 | | $ | 0.09 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | | | |
| June 30, 2023 | | March 31, 2023 | | December 31, 2022 | | | | | | | | | | | | |
| Other Financial and Operating Data (10) | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Profitability Indicators (%) | | | | | | | | | | | | | | | | | |
| Net interest income / Average total interest earning assets (NIM) (11) | 3.83% | | 3.90% | | 3.96 | % | | | | | | | | | | | | |
| Net income / Average total assets (ROA) (6) (12) | 0.31% | | 0.88% | | 0.97 | % | | | | | | | | | | | | |
| Net income / Average stockholders' equity (ROE) (6)(13) | 3.92% | | 11.15% | | 12.10 | % | | | | | | | | | | | | |
| Noninterest income / Total revenue (14) | 24.09% | | 19.02% | | 22.87% | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Capital Indicators (%) | | | | | | | | | | | | | | | | | |
| Total capital ratio (15) | 12.41% | | 12.36% | | 12.39 | % | | | | | | | | | | | | |
| Tier 1 capital ratio (16) | 10.79% | | 10.88% | | 10.89 | % | | | | | | | | | | | | |
| Tier 1 leverage ratio (17) | 8.91% | | 9.04% | | 9.18 | % | | | | | | | | | | | | |
| Common equity tier 1 capital ratio (CET1) (18) | 10.02% | | 10.10% | | 10.10 | % | | | | | | | | | | | | |
| Tangible common equity ratio (19) | 7.34% | | 7.44% | | 7.50 | % | | | | | | | | | | | | |
| Tangible common equity ratio, adjusted for unrealized losses on debt securities held to maturity (20) | 7.16% | | 7.29% | | 7.31% | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Liquidity Ratios (%) | | | | | | | | | | | | | | | | | |
| Loans to Deposits (21) | 95.22% | | 97.64% | | 98.23 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Asset Quality Indicators (%) | | | | | | | | | | | | | | | | | |
| Non-performing assets / Total assets (22) | 0.71% | | 0.51% | | 0.41 | % | | | | | | | | | | | | |
| Non-performing loans / Total gross loans (1) (23) | 0.65% | | 0.31% | | 0.54 | % | | | | | | | | | | | | |
| Allowance for credit losses / Total non-performing loans (23) | 224.51% | | 380.31% | | 222.08 | % | | | | | | | | | | | | |
| Allowance for credit losses / Total loans held for investment | 1.48% | | 1.20% | | 1.22 | % | | | | | | | | | | | | |
| Net charge-offs / Average total loans held for investment (24) | 0.42% | | 0.64% | | 0.59 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Efficiency Indicators (% except FTE) | | | | | | | | | | | | | | | | | |
| Noninterest expense / Average total assets | 3.06% | | 2.82% | | 2.75 | % | | | | | | | | | | | | |
| Salaries and employee benefits / Average total assets | 1.45% | | 1.52% | | 1.45 | % | | | | | | | | | | | | |
| Other operating expenses/ Average total assets (25) | 1.62% | | 1.30% | | 1.30 | % | | | | | | | | | | | | |
| Efficiency ratio (26) | 65.61% | | 63.67% | | 58.42 | % | | | | | | | | | | | | |
| Full-Time-Equivalent Employees (FTEs) (27) | 710 | | 722 | | 692 | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | |
(in thousands, except percentages and per share amounts) | June 30, 2023 | | March 31, 2023 | | December 31, 2022 | | | | | | | | |
| Core Selected Consolidated Results of Operations and Other Data (8) | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Pre-provision net revenue (PPNR) | $ | 38,258 | | | $ | 37,187 | | | $ | 44,457 | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Core pre-provision net revenue (Core PPNR) | $ | 39,196 | | | $ | 37,103 | | | $ | 37,838 | | | | | | | | | |
| Core net income (6) | $ | 8,048 | | | $ | 20,120 | | | $ | 16,817 | | | | | | | | | |
| Core basic earnings per common share (6) | 0.24 | | | 0.60 | | | 0.50 | | | | | | | | | |
| Core earnings per diluted common share (6) (9) | 0.24 | | | 0.59 | | | 0.50 | | | | | | | | | |
| Core net income / Average total assets (Core ROA) (6) (12) | 0.34% | | 0.88% | | 0.74 | % | | | | | | | | |
| Core net income / Average stockholders' equity (Core ROE) (6) (13) | 4.32% | | 11.11% | | 9.26 | % | | | | | | | | |
| Core efficiency ratio (28) | 60.29% | | 62.47% | | 61.34 | % | | | | | | | | |
__________________
(1) Total gross loans include loans held for investment net of unamortized deferred loan origination fees and costs, as well as mortgage loans held for sale carried at fair value. As of June 30, 2023, March 31, 2023 and December 31, 2022, mortgage loans held for sale carried at fair value totaled $49.9 million, $65.3 million and $62.4 million, respectively.
(2) Core deposits consist of total deposits excluding all time deposits.
(3) In the fourth quarter of 2022, the Company announced that the Board of Directors authorized a new repurchase program pursuant to which the Company may purchase, from time to time, up to an aggregate amount of $25 million of its shares of Class A common stock (the “2023 Class A Common Stock Repurchase Program”). In the second and first quarters of 2023, the Company repurchased an aggregate of 95,262 shares of Class A common stock and 22,403 shares of Class A common stock, respectively, at a weighted average price of $17.42 per share and $25.25 per share, respectively, under the 2023 Class A Common Stock Repurchase Program. In the second and first quarters of 2023, the aggregate purchase price for these transactions was approximately $1.7 million and $0.6 million, respectively, including transaction costs.
(4) For each of the second and first quarters of 2023 and the fourth quarter of 2022, the Company’s Board of Directors declared cash dividends of $0.09 per share of the Company’s common stock. The dividend declared in the second quarter of 2023 was paid on May 31, 2023 to shareholders of record at the close of business on May 15, 2023. The dividend declared in the first quarter of 2023 was paid on February 28, 2023 to shareholders of record at the close of business on February 13, 2023. The dividend declared in the fourth quarter of 2022 was paid on November 30, 2022 to shareholders of record at the close of business on November 15, 2022. For each of the second and first quarters of 2023 and the fourth quarter of 2022, the aggregate amount paid in connection with these dividends was $3.0 million.
(5) Assets held for clients in an agency or fiduciary capacity which are not assets of the Company and therefore are not included in the consolidated financial statements.
(6) As previously disclosed, the Company adopted CECL in the fourth quarter of 2022, effective as of January 1, 2022. See Form 10-K for more details on the CECL adoption and related effects to quarterly results for each quarter in the year ended December 31, 2022.
(7) In the three months ended June 30, 2023, March 31, 2023, and December 31, 2022, net income exclude losses of $0.3 million, $0.2 million and $0.2 million, respectively, attributable to a 20% minority interest of Amerant Mortgage LLC.
(8) This presentation contains adjusted financial information determined by methods other than GAAP. This adjusted financial information is reconciled to GAAP in Exhibit 2 - Non-GAAP Financial Measures Reconciliation.
(9) In all the periods shown, potential dilutive instruments consisted of unvested shares of restricted stock, restricted stock units and performance stock units. Potential dilutive instruments were included in the diluted earnings per share computation because, when the unamortized deferred compensation cost related to these shares was divided by the average market price per share in all the periods shown, fewer shares would have been purchased than restricted shares assumed issued. Therefore, in those
periods, such awards resulted in higher diluted weighted average shares outstanding than basic weighted average shares outstanding, and had a dilutive effect in per share earnings.
(10) Operating data for the periods presented have been annualized.
(11) NIM is defined as NII divided by average interest-earning assets, which are loans, securities, deposits with banks and other financial assets which yield interest or similar income.
(12) Calculated based upon the average daily balance of total assets.
(13) Calculated based upon the average daily balance of stockholders’ equity.
(14) Total revenue is the result of net interest income before provision for credit losses plus noninterest income.
(15) Total stockholders’ equity divided by total risk-weighted assets, calculated according to the standardized regulatory capital ratio
calculations.
(16) Tier 1 capital divided by total risk-weighted assets. Tier 1 capital is composed of Common Equity Tier 1 (CET1) capital plus outstanding qualifying trust preferred securities of $62.3 million at each of all the dates presented.
(17) Tier 1 capital divided by quarter to date average assets.
(18) CET1 capital divided by total risk-weighted assets.
(19) Tangible common equity is calculated as the ratio of common equity less goodwill and other intangibles divided by total assets
less goodwill and other intangible assets. Other intangible assets primarily consist of mortgage servicing rights and are included in other assets in the Company’s consolidated balance sheets.
(20) Calculated in the same manner described in footnote 19 but also includes unrealized losses on debt securities held to maturity in the balance of common equity and total assets.
(21) Calculated as the ratio of total loans gross divided by total deposits.
(22) Non-performing assets include all accruing loans past due by 90 days or more, all nonaccrual loans and other real estate owned (“OREO”) properties acquired through or in lieu of foreclosure, and other repossessed assets.
(23) Non-performing loans include all accruing loans past due by 90 days or more and all nonaccrual loans
(24) Calculated based upon the average daily balance of outstanding loan principal balance net of unamortized deferred loan origination fees and costs, excluding the allowance for credit losses. During the second and first quarters of 2023, and in the fourth quarter of 2022, there were net charge offs of $7.5 million, $10.8 million, and $9.8 million, respectively. During the second quarter of 2023, the Company charged-off $7.6 million related to multiple purchased indirect consumer loans and $1.5 million related to multiple commercial loans. During the first quarter of 2023, the Company charged-off $6.5 million in connection with a commercial loan relationship, $6.3 million related to multiple consumer loans and $1.5 million related to multiple commercial and real estate loans. During the fourth quarter of 2022, the Company charged-off $3.9 million related to a CRE loan, $5.5 million related to multiple consumer loans and $1.1 million related to multiple commercial loans.
(25) Other operating expenses is the result of total noninterest expense less salary and employee benefits.
(26) Efficiency ratio is the result of noninterest expense divided by the sum of noninterest income and NII.
(27) As of June 30, 2023, March 31, 2023 and December 31, 2022, includes 93, 94 and 68 FTEs for Amerant Mortgage LLC, respectively.
(28) Core efficiency ratio is the efficiency ratio less the effect of restructuring costs and other non-routine items, described in Exhibit 2 - Non-GAAP Financial Measures Reconciliation.
Exhibit 2- Non-GAAP Financial Measures Reconciliation
The following table sets forth selected financial information derived from the Company’s interim unaudited and annual audited consolidated financial statements, adjusted for certain costs incurred by the Company in the periods presented related to tax deductible restructuring costs, provision for (reversal of) credit losses, provision for income tax expense (benefit), the effect of non-core banking activities such as the sale of loans and securities and other repossessed assets, the valuation of securities, derivatives, loans held for sale and other real estate owned and repossessed assets, the early repayment of FHLB advances, impairment of investments and other non-routine actions intended to improve customer service and operating performance. The Company believes these adjusted numbers are useful to understand the Company’s performance absent these transactions and events.
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended, | | |
(in thousands) | June 30, 2023 | | March 31, 2023 | | December 31, 2022 | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | |
| Net income attributable to Amerant Bancorp Inc. (1) | $ | 7,308 | | | $ | 20,186 | | | $ | 21,973 | | | | | | | | | |
| Plus: provision for credit losses (1) | 29,077 | | | 11,700 | | | 16,857 | | | | | | | | | |
| Plus: provision for income tax expense (1) | 1,873 | | | 5,301 | | | 5,627 | | | | | | | | | |
| Pre-provision net revenue (PPNR) | 38,258 | | | 37,187 | | | 44,457 | | | | | | | | | |
| Plus: non-routine noninterest expense items | 13,383 | | | 3,372 | | | 2,447 | | | | | | | | | |
| | | | | | | | | | | | | |
| Less: non-routine noninterest income items | (12,445) | | | (3,456) | | | (9,066) | | | | | | | | | |
| Core pre-provision net revenue (Core PPNR) | $ | 39,196 | | | $ | 37,103 | | | $ | 37,838 | | | | | | | | | |
| | | | | | | | | | | | | |
| Total noninterest income | $ | 26,619 | | | $ | 19,343 | | | $ | 24,365 | | | | | | | | | |
| Less: Non-routine noninterest income items: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Derivatives gains, net | 242 | | | 14 | | | 1,040 | | | | | | | | | |
| Securities losses, net | (1,237) | | | (9,731) | | | (3,364) | | | | | | | | | |
| Gains on early extinguishment of FHLB advances, net | 13,440 | | | 13,173 | | | 11,390 | | | | | | | | | |
| | | | | | | | | | | | | |
| Total non-routine noninterest income items | $ | 12,445 | | | $ | 3,456 | | | $ | 9,066 | | | | | | | | | |
| Core noninterest income | $ | 14,174 | | | $ | 15,887 | | | $ | 15,299 | | | | | | | | | |
| | | | | | | | | | | | | |
| Total noninterest expenses | $ | 72,500 | | | $ | 64,733 | | | $ | 62,241 | | | | | | | | | |
| Less: non-routine noninterest expense items | | | | | | | | | | | | | |
| Restructuring costs (2): | | | | | | | | | | | | | |
| Staff reduction costs (3) | 2,184 | | | 213 | | | 1,221 | | | | | | | | | |
| Contract termination costs (4) | 1,550 | | | — | | | — | | | | | | | | | |
| Consulting and other professional fees (5) | 2,060 | | | 2,690 | | | 1,226 | | | | | | | | | |
| Disposition of fixed assets (6) | 1,419 | | | — | | | — | | | | | | | | | |
| Branch closure expenses and related charges (7) | 1,558 | | | 469 | | | — | | | | | | | | | |
| | | | | | | | | | | | | |
| Total restructuring costs | $ | 8,771 | | | $ | 3,372 | | | $ | 2,447 | | | | | | | | | |
| Other non-routine noninterest expense items: | | | | | | | | | | | | | |
| Loss on sale of repossessed assets (8) | 2,649 | | | — | | | — | | | | | | | | | |
| Impairment charge on investment carried at cost | 1,963 | | | — | | | — | | | | | | | | | |
| Total non-routine noninterest expense items | $ | 13,383 | | | $ | 3,372 | | | $ | 2,447 | | | | | | | | | |
| Core noninterest expenses | $ | 59,117 | | | $ | 61,361 | | | $ | 59,794 | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended, | | |
(in thousands, except percentages and per share amounts) | June 30, 2023 | | March 31, 2023 | | December 31, 2022 | | | | | | | | |
| | | |
| Net income attributable to Amerant Bancorp Inc. (1) | $ | 7,308 | | $ | 20,186 | | $ | 21,973 | | | | | | | | |
| Plus after-tax non-routine items in noninterest expense: | | | | | | | | | | | | | |
| Non-routine items in noninterest expense before income tax effect | 13,383 | | 3,372 | | 2,447 | | | | | | | | |
| Income tax effect (9) | (2,811) | | (708) | | (460) | | | | | | | | |
| Total after-tax non-routine items in noninterest expense | 10,572 | | 2,664 | | 1,987 | | | | | | | | |
| Less after-tax non-routine items in noninterest income: | | | | | | | | | | | | | |
| Non-routine items in noninterest income before income tax effect | (12,445) | | (3,456) | | (9,066) | | | | | | | | |
| Income tax effect (9) | 2,613 | | 726 | | 1,923 | | | | | | | | |
| Total after-tax non-routine items in noninterest income | (9,832) | | (2,730) | | (7,143) | | | | | | | | |
| Core net income (1) | $ | 8,048 | | $ | 20,120 | | $ | 16,817 | | | | | | | | |
| | | | | | | | | | | | | |
| Basic earnings per share (1) | $ | 0.22 | | $ | 0.60 | | $ | 0.66 | | | | | | | | |
| Plus: after tax impact of non-routine items in noninterest expense | 0.31 | | 0.08 | | 0.06 | | | | | | | | |
| Less: after tax impact of non-routine items in noninterest income | (0.29) | | (0.08) | | (0.22) | | | | | | | | |
| Total core basic earnings per common share (1) | $ | 0.24 | | $ | 0.60 | | $ | 0.50 | | | | | | | | |
| | | | | | | | | | | | | |
| Diluted earnings per share (1) (10) | $ | 0.22 | | $ | 0.60 | | $ | 0.65 | | | | | | | | |
| Plus: after tax impact of non-routine items in noninterest expense | 0.31 | | 0.08 | | 0.06 | | | | | | | | |
| Less: after tax impact of non-routine items in noninterest income | (0.29) | | (0.09) | | (0.21) | | | | | | | | |
| Total core diluted earnings per common share (1) | $ | 0.24 | | $ | 0.59 | | $ | 0.50 | | | | | | | | |
| | | | | | | | | | | | | |
| Net income / Average total assets (ROA) (1) | 0.31 | % | | 0.88 | % | | 0.97 | % | | | | | | | | |
| Plus: after tax impact of non-routine items in noninterest expense | 0.45 | % | | 0.12 | % | | 0.09 | % | | | | | | | | |
| Less: after tax impact of non-routine items in noninterest income | (0.42) | % | | (0.12) | % | | (0.32) | % | | | | | | | | |
| Core net income / Average total assets (Core ROA) (1) | 0.34 | % | | 0.88 | % | | 0.74 | % | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Net income / Average stockholders' equity (ROE) (1) | 3.92 | % | | 11.15 | % | | 12.10 | % | | | | | | | | |
| Plus: after tax impact of non-routine items in noninterest expense | 5.68 | % | | 1.47 | % | | 1.09 | % | | | | | | | | |
| Less: after tax impact of non-routine items in noninterest income | (5.28) | % | | (1.51) | % | | (3.93) | % | | | | | | | | |
| Core net income / Average stockholders' equity (Core ROE) (1) | 4.32 | % | | 11.11 | % | | 9.26 | % | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Efficiency ratio | 65.61 | % | | 63.67 | % | | 58.42 | % | | | | | | | | |
| Less: impact of non-routine items in noninterest expense | (12.11) | % | | (3.32) | % | | (2.30) | % | | | | | | | | |
| | | | | | | | | | | | | |
| Plus: impact of non-routine items in noninterest income | 6.79 | % | | 2.12 | % | | 5.22 | % | | | | | | | | |
| Core efficiency ratio | 60.29 | % | | 62.47 | % | | 61.34 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Three Months Ended, | | | | |
(in thousands, except percentages, share data and per share amounts) | June 30, 2023 | | March 31, 2023 | | December 31, 2022 | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Stockholders' equity | $ | 720,956 | | $ | 729,056 | | $ | 705,726 | | | | | | | | | | | |
| Less: goodwill and other intangibles (11) | (24,124) | | (24,292) | | (23,161) | | | | | | | | | | | |
| Tangible common stockholders' equity | $ | 696,832 | | $ | 704,764 | | $ | 682,565 | | | | | | | | | | | |
| Total assets | 9,519,526 | | 9,495,302 | | 9,127,804 | | | | | | | | | | | |
| Less: goodwill and other intangibles (11) | (24,124) | | (24,292) | | (23,161) | | | | | | | | | | | |
| Tangible assets | $ | 9,495,402 | | $ | 9,471,010 | | $ | 9,104,643 | | | | | | | | | | | |
| Common shares outstanding | 33,736,159 | | 33,814,260 | | 33,815,161 | | | | | | | | | | | |
| Tangible common equity ratio | 7.34 | % | | 7.44 | % | | 7.50 | % | | | | | | | | | | | |
| Stockholders' book value per common share | $ | 21.37 | | $ | 21.56 | | $ | 20.87 | | | | | | | | | | | |
| Tangible stockholders' equity book value per common share | $ | 20.66 | | $ | 20.84 | | $ | 20.19 | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Tangible common stockholders' equity | $ | 696,832 | | $ | 704,764 | | $ | 682,565 | | | | | | | | | | | |
| Less: Net unrealized accumulated losses on debt securities held to maturity, net of tax (12) | (18,503) | | (15,542) | | (18,234) | | | | | | | | | | | |
| Tangible common stockholders' equity, adjusted for net unrealized accumulated losses on debt securities held to maturity | $ | 678,329 | | $ | 689,222 | | $ | 664,331 | | | | | | | | | | | |
| Tangible assets | $ | 9,495,402 | | $ | 9,471,010 | | $ | 9,104,643 | | | | | | | | | | | |
| Less: Net unrealized accumulated losses on debt securities held to maturity, net of tax (12) | (18,503) | | (15,542) | | (18,234) | | | | | | | | | | | |
| Tangible assets, adjusted for net unrealized accumulated losses on debt securities held to maturity | $ | 9,476,899 | | $ | 9,455,468 | | $ | 9,086,409 | | | | | | | | | | | |
| Common shares outstanding | 33,736,159 | | 33,814,260 | | 33,815,161 | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| Tangible common equity ratio, adjusted for net unrealized accumulated losses on debt securities held to maturity | 7.16 | % | | 7.29 | % | | 7.31 | % | | | | | | | | | | | |
| Tangible stockholders' book value per common share, adjusted for net unrealized accumulated losses on debt securities held to maturity | $ | 20.11 | | $ | 20.38 | | $ | 19.65 | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
____________
(1) As previously disclosed, the Company adopted CECL in the fourth quarter of 2022, effective as of January 1, 2022. See Form 10-K for more details of the CECL adoption and related effects to quarterly results for each quarter in the year ended December 31, 2022.
(2) Expenses incurred for actions designed to implement the Company’s business strategy. These actions include, but are not limited to reductions in workforce, streamlining operational processes, rolling out the Amerant brand, implementation of new technology system applications, decommissioning of legacy technologies, enhanced sales tools and training, expanded product offerings and improved customer analytics to identify opportunities.
(3) Staff reduction costs in the three months ended June 30, 2023, March 31, 2023 and December 31, 2022 consist of severance expenses related to organizational rationalization.
(4) Contract termination and related costs associated with third party vendors resulting from the Company’s engagement of FIS.
(5) Includes expenses in connection with the engagement of FIS of $2.0 million, $2.6 million and $1.1 million in the three months ended June 30, 2023, March 31, 2023 and December 31, 2022, respectively.
(6) Include expenses in connection with the disposition of fixed assets due to the write off of in-development software in the three months ended June 30, 2023.
(7) In the three months ended June 30, 2023, consists of expenses associated with the decision to close a branch in Miami, Florida in 2023, including $0.9 million of accelerated amortization of leasehold improvements and $0.6 million of right-of-use, or ROU asset impairment. In the three months ended March 31, 2023, includes $0.5 million of ROU asset impairment associated with the closure of a branch in Houston, Texas in 2023.
(8) In the three months ended June 30, 2023, amount represents the loss on sale of repossessed assets in connection with our equipment-financing activities.
(9) In the three months ended March 31, 2023, amounts were calculated based upon the effective tax rate for the period of 21.00%. For all of the other periods shown, amounts represent the difference between the prior and current period year-to-date tax effect.
(10) In the three months ended June 30, 2023, March 31, 2023 and December 31, 2022, potential dilutive instruments consisted of unvested shares of restricted stock, restricted stock units and performance stock units. In all the periods presented, potential dilutive instruments were included in the diluted earnings per share computation because, when the unamortized deferred compensation cost related to these shares was divided by the average market price per share in those periods, fewer shares would have been purchased than restricted shares assumed issued. Therefore, in those periods, such awards resulted in higher diluted weighted average shares outstanding than basic weighted average shares outstanding, and had a dilutive effect on per share earnings.
(11) Other intangible assets primarily consist of mortgage servicing rights (“MSRs”) of $1.3 million, $1.4 million and $1.3 million at June 30, 2023, March 31, 2023 and December 31, 2022, respectively, and are included in other assets in the Company’s consolidated balance sheets.
(12) In the three months ended June 30, 2023, March 31, 2023 and December 31, 2022, amounts were calculated based upon the fair value on debt securities held to maturity, and assuming a tax rate of 25.46%, 25.53% and 25.55%, respectively.
Exhibit 3 - Average Balance Sheet, Interest and Yield/Rate Analysis
The following tables present average balance sheet information, interest income, interest expense and the corresponding average yields earned and rates paid for the periods presented. The average balances for loans include both performing and nonperforming balances. Interest income on loans includes the effects of discount accretion and the amortization of non-refundable loan origination fees, net of direct loan origination costs, accounted for as yield adjustments. Average balances represent the daily average balances for the periods presented.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended |
| June 30, 2023 | | March 31, 2023 | | June 30, 2022 |
| (in thousands, except percentages) | Average
Balances | | Income/
Expense | | Yield/
Rates | | Average Balances | | Income/ Expense | | Yield/ Rates | | Average
Balances | | Income/
Expense | | Yield/
Rates |
| Interest-earning assets: | | | | | | | | | | | | | | | | | |
| Loan portfolio, net (1)(2) | $ | 7,068,034 | | | $ | 119,570 | | | 6.79 | % | | $ | 6,901,352 | | | $ | 108,501 | | | 6.38 | % | | $ | 5,635,147 | | | $ | 61,514 | | | 4.38 | % |
| Debt securities available for sale (3) (4) | 1,041,039 | | | 10,397 | | | 4.01 | % | | 1,058,831 | | | 10,173 | | | 3.90 | % | | 1,113,994 | | | 7,614 | | | 2.74 | % |
| Debt securities held to maturity (5) | 236,297 | | | 1,976 | | | 3.35 | % | | 240,627 | | | 2,112 | | | 3.56 | % | | 177,483 | | | 981 | | | 2.22 | % |
| Debt securities held for trading | 262 | | | 3 | | | 4.59 | % | | 18 | | | — | | | — | % | | 101 | | | 1 | | | 3.97 | % |
| Equity securities with readily determinable fair value not held for trading | 27 | | | — | | | — | % | | 4,886 | | | — | | | — | % | | 12,407 | | | — | | | — | % |
| Federal Reserve Bank and FHLB stock | 52,917 | | | 857 | | | 6.50 | % | | 57,803 | | | 1,014 | | | 7.11 | % | | 49,476 | | | 539 | | | 4.37 | % |
| Deposits with banks | 379,123 | | | 5,694 | | | 6.02 | % | | 302,791 | | | 3,330 | | | 4.46 | % | | 224,751 | | | 518 | | | 0.92 | % |
| Total interest-earning assets | 8,777,699 | | | 138,497 | | | 6.33 | % | | 8,566,308 | | | 125,130 | | | 5.92 | % | | 7,213,359 | | | 71,167 | | | 3.96 | % |
| Total non-interest-earning assets (6) | 710,404 | | | | | | | 739,522 | | | | | | | 635,871 | | | | | |
| Total assets | $ | 9,488,103 | | | | | | | $ | 9,305,830 | | | | | | | $ | 7,849,230 | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended |
| June 30, 2023 | | March 31, 2023 | | June 30, 2022 |
| (in thousands, except percentages) | Average
Balances | | Income/
Expense | | Yield/
Rates | | Average Balances | | Income/ Expense | | Yield/ Rates | | Average
Balances | | Income/
Expense | | Yield/
Rates |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | | | |
| Checking and saving accounts | | | | | | | | | | | | | | | | | |
| Interest bearing DDA | $ | 2,641,746 | | | $ | 16,678 | | | 2.53 | % | | $ | 2,342,620 | | | $ | 12,855 | | | 2.23 | % | | $ | 1,654,232 | | $ | 1,034 | | | 0.25 | % |
| Money market | 1,169,047 | | | 9,401 | | | 3.23 | % | | 1,333,465 | | | 7,881 | | | 2.40 | % | | 1,262,566 | | 1,351 | | | 0.43 | % |
| Savings | 287,493 | | | 36 | | | 0.05 | % | | 299,501 | | | 46 | | | 0.06 | % | | 318,967 | | 14 | | | 0.02 | % |
| Total checking and saving accounts | 4,098,286 | | | 26,115 | | | 2.56 | % | | 3,975,586 | | | 20,782 | | | 2.12 | % | | 3,235,765 | | 2,399 | | | 0.30 | % |
| Time deposits | 2,045,747 | | | 18,528 | | | 3.63 | % | | 1,767,603 | | | 12,834 | | | 2.94 | % | | 1,256,112 | | 4,503 | | | 1.44 | % |
| Total deposits | 6,144,033 | | | 44,643 | | | 2.91 | % | | 5,743,189 | | | 33,616 | | | 2.37 | % | | 4,491,877 | | 6,902 | | | 0.62 | % |
| Securities sold under agreements to repurchase | 60 | | | 1 | | | 6.68 | % | | — | | | — | | | — | % | | 60 | | — | | | — | % |
| Advances from the FHLB (7) | 828,301 | | | 7,621 | | | 3.69 | % | | 959,392 | | | 6,763 | | | 2.86 | % | | 867,573 | | 3,341 | | | 1.54 | % |
| Senior notes | 59,330 | | | 941 | | | 6.36 | % | | 59,250 | | | 942 | | | 6.45 | % | | 59,013 | | 942 | | | 6.40 | % |
| Subordinated notes | 29,348 | | | 362 | | | 4.95 | % | | 29,306 | | | 361 | | | 5.00 | % | | 29,178 | | 361 | | | 4.96 | % |
| Junior subordinated debentures | 64,178 | | | 1,052 | | | 6.57 | % | | 64,178 | | | 1,115 | | | 7.05 | % | | 64,178 | | 676 | | | 4.22 | % |
| Total interest-bearing liabilities | 7,125,250 | | | 54,620 | | | 3.07 | % | | 6,855,315 | | | 42,797 | | | 2.53 | % | | 5,511,879 | | 12,222 | | | 0.89 | % |
| Non-interest-bearing liabilities: | | | | | | | | | | | | | | | | | |
| Non-interest bearing demand deposits | 1,332,189 | | | | | | | 1,377,966 | | | | | | | 1,309,520 | | | | |
| Accounts payable, accrued liabilities and other liabilities | 283,653 | | | | | | | 338,351 | | | | | | | 283,721 | | | | |
| Total non-interest-bearing liabilities | 1,615,842 | | | | | | | 1,716,317 | | | | | | | 1,593,241 | | | | |
| Total liabilities | 8,741,092 | | | | | | | 8,571,632 | | | | | | | 7,105,120 | | | | |
| Stockholders’ equity | 747,011 | | | | | | | 734,198 | | | | | | | 744,110 | | | | |
| Total liabilities and stockholders' equity | $ | 9,488,103 | | | | | | | $ | 9,305,830 | | | | | | | $ | 7,849,230 | | | | |
| Excess of average interest-earning assets over average interest-bearing liabilities | $ | 1,652,449 | | | | | | | $ | 1,710,993 | | | | | | | $ | 1,701,480 | | | | |
| Net interest income | | | $ | 83,877 | | | | | | | $ | 82,333 | | | | | | | $ | 58,945 | | | |
| Net interest rate spread | | | | | 3.26 | % | | | | | | 3.39 | % | | | | | | 3.07 | % |
| Net interest margin (8) | | | | | 3.83 | % | | | | | | 3.90 | % | | | | | | 3.28 | % |
| Cost of total deposits (9) | | | | | 2.40 | % | | | | | | 1.91 | % | | | | | | 0.48 | % |
| Ratio of average interest-earning assets to average interest-bearing liabilities | 123.19 | % | | | | | | 124.96 | % | | | | | | 130.87 | % | | | | |
| Average non-performing loans/ Average total loans | 0.54 | % | | | | | | 0.46 | % | | | | | | 0.56 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended |
| June 30, 2023 | | June 30, 2022 |
| (in thousands, except percentages) | Average
Balances | | Income/
Expense | | Yield/
Rates | | Average Balances | | Income/ Expense | | Yield/ Rates |
| Interest-earning assets: | | | | | | | | | | | |
| Loan portfolio, net (1)(2) | $ | 6,985,153 | | | $ | 228,071 | | | 6.58 | % | | $ | 5,564,362 | | | $ | 117,852 | | | 4.27 | % |
| Debt securities available for sale (3)(4) | 1,049,886 | | 20,568 | | | 3.95 | % | | 1,142,087 | | 14,992 | | | 2.65 | % |
| Debt securities held to maturity (5) | 238,450 | | 4,088 | | | 3.46 | % | | 146,243 | | 1,684 | | | 2.32 | % |
| Debt securities held for trading | 141 | | 4 | | | 5.72 | % | | 68 | | 2 | | | 5.93 | % |
| Equity securities with readily determinable fair value not held for trading | 2,443 | | — | | | — | % | | 6,885 | | — | | | — | % |
| Federal Reserve Bank and FHLB stock | 55,346 | | 1,872 | | | 6.82 | % | | 50,485 | | 1,085 | | | 4.33 | % |
| Deposits with banks | 341,168 | | 9,024 | | | 5.33 | % | | 241,893 | | 650 | | | 0.54 | % |
| Total interest-earning assets (6) | 8,672,587 | | 263,627 | | | 6.13 | % | | 7,152,023 | | 136,265 | | | 3.84 | % |
| Total non-interest-earning assets less allowance for loan losses | 725,675 | | | | | | 626,501 | | | | |
| Total assets | $ | 9,398,262 | | | | | | $ | 7,778,524 | | | | |
| | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | |
| Checking and saving accounts - | | | | | | | | | | | |
| Interest bearing DDA | $ | 2,493,009 | | | $ | 29,533 | | | 2.39 | % | | $ | 1,605,626 | | | $ | 1,324 | | | 0.17 | % |
| Money market | 1,250,801 | | 17,281 | | | 2.79 | % | | 1,257,955 | | 2,084 | | | 0.33 | % |
| Savings | 293,464 | | 83 | | | 0.06 | % | | 322,027 | | 26 | | | 0.02 | % |
| Total checking and saving accounts | 4,037,274 | | 46,897 | | | 2.34 | % | | 3,185,608 | | 3,434 | | | 0.22 | % |
| Time deposits | 1,907,443 | | 31,362 | | | 3.32 | % | | 1,275,587 | | 8,784 | | | 1.39 | % |
| Total deposits | 5,944,717 | | 78,259 | | | 2.65 | % | | 4,461,195 | | 12,218 | | | 0.55 | % |
| Securities sold under agreements to repurchase | 30 | | 1 | | | 6.72 | % | | 30 | | — | | | — | % |
| Advances from the FHLB (7) | 893,484 | | 14,384 | | | 3.25 | % | | 892,170 | | 5,822 | | | 1.32 | % |
| Senior notes | 59,290 | | 1,883 | | | 6.40 | % | | 58,974 | | 1,884 | | | 6.44 | % |
| Subordinated notes | 29,327 | | 723 | | | 4.97 | % | | 18,375 | | 449 | | | 4.93 | % |
| Junior subordinated debentures | 64,178 | | 2,167 | | | 6.81 | % | | 64,178 | | 1,302 | | | 4.09 | % |
| Total interest-bearing liabilities | 6,991,026 | | 97,417 | | | 2.81 | % | | 5,494,922 | | 21,675 | | | 0.80 | % |
| Non-interest-bearing liabilities: | | | | | | | | | | | |
| Non-interest bearing demand deposits | 1,354,951 | | | | | | 1,254,948 | | | | |
| Accounts payable, accrued liabilities and other liabilities | 310,716 | | | | | | 257,559 | | | | |
| Total non-interest-bearing liabilities | 1,665,667 | | | | | | 1,512,507 | | | | |
| Total liabilities | 8,656,693 | | | | | | 7,007,429 | | | | |
| Stockholders’ equity | 741,569 | | | | | | 771,095 | | | | |
| Total liabilities and stockholders' equity | $ | 9,398,262 | | | | | | | $ | 7,778,524 | | | | | |
| Excess of average interest-earning assets over average interest-bearing liabilities | $ | 1,681,561 | | | | | | | $1,657,101 | | | | |
| Net interest income | | | $ | 166,210 | | | | | | | $ | 114,590 | | | |
| Net interest rate spread | | | | | 3.32 | % | | | | | | 3.04 | % |
| Net interest margin (8) | | | | | 3.86 | % | | | | | | 3.23 | % |
| Cost of total deposits (9) | | | | | 2.16 | % | | | | | | 0.43 | % |
| Ratio of average interest-earning assets to average interest-bearing liabilities | 124.05 | % | | | | | | 130.16 | % | | | | |
| Average non-performing loans/ Average total loans | 0.50 | % | | | | | | 0.63 | % | | | | |
___________
(1) Includes loans held for investment net of the allowance for credit losses, and mortgage loans held for sale carried at fair value. The average balance of the allowance for credit losses was $84.6 million, $81.4 million and $55.9 million in the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and $83.0 million and $61.7 million in the six months ended June 30, 2023 and June 30, 2022, respectively. The average balance of mortgage loans held for sale carried at fair value was $85.1 million, $66.4 million and $112.2 million in the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and $75.8 million and $123.6 million in the six months ended June 30, 2023 and June 30, 2022, respectively.
(2) Includes average non-performing loans of $38.5 million, $31.8 million and $32.7 million for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, $35.2 million and $36.0 million in the six months ended June 30, 2023 and June 30, 2022, respectively.
(3) Includes the average balance of net unrealized gains and losses in the fair value of debt securities available for sale. The average balance includes average unrealized net losses of $106.7 million, $104.9 million and $58.0 million in the three months ended June 30, 2023, March 31, 2023, and June 30, 2022, respectively, and average unrealized net losses of $105.8 million and $28.0 million in the six months ended June 30, 2023 and 2022, respectively.
(4) Includes nontaxable securities with average balances of $19.5 million, $19.7 million and $14.8 million for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and $19.4 million and $15.7 million in the six months ended June 30, 2023 and June 30, 2022, respectively. The tax equivalent yield for these nontaxable securities was 4.53%, 4.56% and 2.97% for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and 4.59% and 2.85% in the six months ended June 30, 2023 and June 30, 2022. In 2023 and 2022, the tax equivalent yields were calculated assuming a 21% tax rate and dividing the actual yield by 0.79.
(5) Includes nontaxable securities with average balances of $50.1 million, $50.7 million and $42.7 million for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and $50.4 million and $43.4 million in the six months ended June 30, 2023 and June 30, 2022, respectively. The tax equivalent yield for these nontaxable securities was 4.16%, 4.20% and 3.31% for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and 4.18% and 3.22% in the six months ended June 30, 2023 and June 30, 2022. In 2023 and 2022, the tax equivalent yields were calculated assuming a 21% tax rate and dividing the actual yield by 0.79.
(6) Excludes the allowance for credit losses.
(7) The terms of the FHLB advance agreements require the Bank to maintain certain investment securities or loans as collateral for these advances.
(8) NIM is defined as net interest income divided by average interest-earning assets, which are loans, securities, deposits with banks and other financial assets which yield interest or similar income.
(9) Calculated based upon the average balance of total noninterest bearing and interest bearing deposits.
Exhibit 4 - Noninterest Income
This table shows the amounts of each of the categories of noninterest income for the periods presented.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | | Six Months Ended June 30, |
| June 30, 2023 | | March 31, 2023 | | | | | | | June 30, 2022 | | | 2023 | | 2022 |
| (in thousands, except percentages) | Amount | | % | | Amount | | % | | | | | | | | | | | Amount | | % | | | Amount | % | | Amount | % |
| | | | | | | | |
| Deposits and service fees | $ | 4,944 | | | 18.6 | % | | $ | 4,955 | | | 25.6 | % | | | | | | | | | | | $ | 4,577 | | | 35.4 | % | | | 9,899 | | 21.5 | % | | $ | 9,197 | | 34.1 | % |
| Brokerage, advisory and fiduciary activities | 4,256 | | | 16.0 | % | | 4,182 | | | 21.6 | % | | | | | | | | | | | 4,439 | | | 34.3 | % | | | 8,438 | | 18.4 | % | | 9,035 | | 33.5 | % |
Change in cash surrender value of bank owned life insurance (“BOLI”)(1) | 1,429 | | | 5.4 | % | | 1,412 | | | 7.3 | % | | | | | | | | | | | 1,334 | | | 10.3 | % | | | 2,841 | | 6.2 | % | | 2,676 | | 9.9 | % |
| Cards and trade finance servicing fees | 562 | | | 2.1 | % | | 533 | | | 2.8 | % | | | | | | | | | | | 508 | | | 3.9 | % | | | 1,095 | | 2.4 | % | | 1,098 | | 4.1 | % |
| Gain (loss) on early extinguishment of FHLB advances, net | 13,440 | | | 50.5 | % | | 13,173 | | | 68.1 | % | | | | | | | | | | | 2 | | | — | % | | | 26,613 | | 57.9 | % | | (712) | | (2.6) | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Securities losses, net (2) | (1,237) | | | (4.7) | % | | (9,731) | | | (50.3) | % | | | | | | | | | | | (2,602) | | | (20.1) | % | | | (10,968) | | (23.9) | % | | (1,833) | | (6.8) | % |
Loan-level derivative income (3) | 476 | | | 1.8 | % | | 2,071 | | | 10.7 | % | | | | | | | | | | | 1,009 | | | 7.8 | % | | | 2,547 | | 5.5 | % | | 4,161 | | 15.4 | % |
Derivative gains (losses), net (4) | 242 | | | 0.9 | % | | 14 | | | 0.1 | % | | | | | | | | | | | 855 | | | 6.6 | % | | | 256 | | 0.6 | % | | (490) | | (1.8) | % |
Other noninterest income (5) | 2,507 | | | 9.4 | % | | 2,734 | | | 14.1 | % | | | | | | | | | | | 2,809 | | | 21.8 | % | | | 5,241 | | 11.4 | % | | 3,824 | | 14.2 | % |
| Total noninterest income | $ | 26,619 | | | 100.0 | % | | $ | 19,343 | | | 100.0 | % | | | | | | | | | | | $ | 12,931 | | | 100.0 | % | | | $ | 45,962 | | 100.0 | % | | $ | 26,956 | | 100.0 | % |
__________________
(1) Changes in cash surrender value of BOLI are not taxable.
(2) Includes net loss on sale of debt securities available for sale of $1.2 million and $9.5 million in the three months ended June 30, 2023 and March 31, 2023, respectively, and net loss and gain on the sale of debt securities available for sale of $10.8 million and $49 thousand in the six months ended June 30, 2023 and 2022, respectively. There were no gains or losses on the sale of debt securities available for sale in the three months ended June 30, 2022. In addition, includes unrealized losses of $2.6 million and $1.9 million in the three and six month periods ended June 30, 2022, respectively, related to the change in fair value of equity securities with readily available fair value not held for trading which are recorded in results of the period. There were no significant unrealized losses related to equity securities with readily available fair value not held for trading in the three and six month periods ended June 30, 2023. Also, in the three months ended March 31, 2023, the Company sold all of its equity securities with readily available fair value not held for trading, with a total fair value of $11.2 million at the time of sale, and recognized a net loss of $0.2 million in connection with this transaction.
(3) Income from interest rate swaps and other derivative transactions with customers. The Company incurred expenses related to derivative transactions with customers of $0.1 million, $1.6 million and $2.0 million in the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and $1.7 million and $3.1 million in the six months ended June 30, 2023 and 2022, respectively, which are included as part of noninterest expenses under loan-level derivative expense.
(4) Net unrealized gains and losses related to uncovered interest rate caps with clients.
(5) Includes mortgage banking income of $1.6 million, $1.8 million and $2.4 million in the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and $3.4 million and $3.1 million in the six months ended June 30, 2023 and 2022, respectively, related to Amerant Mortgage. Other sources of income in the periods shown include foreign currency exchange transactions with customers and valuation income on the investment balances held in the non-qualified deferred compensation plan.
Exhibit 5 - Noninterest Expense
This table shows the amounts of each of the categories of noninterest expense for the periods presented.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | | | Six Months Ended June 30, |
| June 30, 2023 | | March 31, 2023 | | | | | | June 30, 2022 | | | | 2023 | | 2022 |
| (in thousands, except percentages) | Amount | % | | Amount | % | | | | | | | | | | Amount | % | | | | Amount | % | | Amount | % |
| | | | | | | | | |
Salaries and employee benefits (1) | $ | 34,247 | | 47.2 | % | | $ | 34,876 | | 53.9 | % | | | | | | | | | | $ | 30,212 | | 48.5 | % | | | | $ | 69,123 | | 50.4 | % | | $ | 60,615 | | 49.3 | % |
Occupancy and equipment (2) | 6,737 | | 9.3 | % | | 6,798 | | 10.5 | % | | | | | | | | | | 7,760 | | 12.5 | % | | | | 13,535 | | 9.9 | % | | 14,485 | | 11.8 | % |
Professional and other services fees (3) | 7,415 | | 10.2 | % | | 7,628 | | 11.8 | % | | | | | | | | | | 4,734 | | 7.6 | % | | | | 15,043 | | 11.0 | % | | 10,873 | | 8.8 | % |
Loan-level derivative expense (4) | 110 | | 0.2 | % | | 1,600 | | 2.5 | % | | | | | | | | | | 2,012 | | 3.2 | % | | | | 1,710 | | 1.3 | % | | 3,055 | | 2.5 | % |
| Telecommunications and data processing (5) | 5,027 | | 6.9 | % | | 3,064 | | 4.7 | % | | | | | | | | | | 3,214 | | 5.2 | % | | | | 8,091 | | 5.9 | % | | 7,252 | | 5.9 | % |
| Depreciation and amortization (6) | 2,275 | | 3.1 | % | | 1,292 | | 2.0 | % | | | | | | | | | | 1,294 | | 2.1 | % | | | | 3,567 | | 2.6 | % | | 2,446 | | 2.0 | % |
| FDIC assessments and insurance | 2,739 | | 3.8 | % | | 2,737 | | 4.2 | % | | | | | | | | | | 1,526 | | 2.5 | % | | | | 5,476 | | 4.0 | % | | 2,922 | | 2.4 | % |
Loans held for sale valuation expense (reversal) (7) | — | | — | % | | — | | — | % | | | | | | | | | | (300) | | (0.5) | % | | | | — | | — | % | | 159 | | 0.1 | % |
| Advertising expenses | 4,332 | | 6.0 | % | | 2,586 | | 4.0 | % | | | | | | | | | | 3,253 | | 5.2 | % | | | | 6,918 | | 5.0 | % | | 6,225 | | 5.1 | % |
| Other real estate owned and repossessed assets expense, net (8)(9) | 2,431 | | 3.4 | % | | — | | — | % | | | | | | | | | | 3,174 | | 5.1 | % | | | | 2,431 | | 1.8 | % | | 3,174 | | 2.6 | % |
Contract termination costs (10) | 1,550 | | 2.1 | % | | — | | — | % | | | | | | | | | | 2,802 | | 4.5 | % | | | | 1,550 | | 1.1 | % | | 6,814 | | 5.5 | % |
Other operating expenses (11) | 5,637 | | 7.8 | % | | 4,152 | | 6.4 | % | | | | | | | | | | 2,560 | | 4.1 | % | | | | 9,789 | | 7.0 | % | | 5,039 | | 4.0 | % |
| Total noninterest expense (12) | $ | 72,500 | | 100.0 | % | | $ | 64,733 | | 100.0 | % | | | | | | | | | | $ | 62,241 | | 100.0 | % | | | | $ | 137,233 | | 100.0 | % | | $ | 123,059 | | 100.0 | % |
___
(1) Includes staff reduction costs of $2.2 million, $0.2 million and $0.7 million in the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and $2.4 million and $1.4 million in the six months ended June 30, 2023 and 2022, respectively, which consist of severance expenses primarily related to organizational rationalization.
(2) In the three months ended June 30, 2023, includes $0.6 million related to ROU asset impairment in connection with the decision to close a branch in Miami, Florida in 2023. In the three months ended March 31, 2023, includes $0.5 million related to ROU asset impairment in connection with the closure of a branch in Houston, Texas in 2023. In each of the three and six month periods ended June 30, 2022, includes ROU asset impairment changes of $1.6 million in connection with the closure of a branch in Pembroke Pines, Florida in 2022.
(3) Includes additional expenses of $2.0 million and $2.6 million in the three months ended June 30, 2023 and March 31, 2023, respectively, and $4.6 million and $0.8 million in the six months ended June 30, 2023 and 2022, respectively, related to the engagement of FIS. There were no additional expenses related to the engagement of FIS in the three months ended June 30, 2022.
(4) Includes services fees in connection with our loan-level derivative income generation activities.
(5) Includes a charge of $1.4 million in each of the three and six month periods ended June 30, 2023 related to the disposition of fixed assets due to the write off of in-development software.
(6) Includes a charge of $0.9 million in each of the three and six month periods ended June 30, 2023 for the accelerated depreciation of leasehold improvements in connection with decision to close a branch in Miami, Florida in 2023.
(7) Valuation allowance as a result of changes in the fair value of loans held for sale carried at the lower of cost or fair value.
(8) In each of the three and six month periods ended June 30, 2023, includes a loss on sale of repossessed assets in connection with our equipment-financing activities of $2.6 million. In each of the the three and six month periods ended June 30, 2022, includes $3.2 million related to the fair value adjustment of one OREO property in New York. In addition, in each of the three and six month periods ended June 30, 2023, includes OREO rental income of $0.4 million. We had no OREO rental income in the three months ended March 31, 2023 and June 30, 2022 and in the six months ended June 30, 2022.
(9) In the three months ended June 30, 2023, other real estate owned (“OREO”) and repossessed assets expense is presented separately in the Company’s consolidated statement of operations and comprehensive (loss) income. In 2022, while OREO valuation expense was presented separately, all other OREO-related expenses were presented as part of other operating expenses in the Company’s consolidated statement of operations and comprehensive (loss) income. We had no other repossessed assets in 2022.
(10)Contract termination and related costs associated with third party vendors resulting from the Company’s transition to our new technology provider.
(11) In each of the three and six month periods ended June 30, 2023, includes an impairment charge of $2.0 million related to an investment carried at cost and included in other assets. In addition, in all of the periods shown, includes charitable contributions, community engagement, postage and courier expenses and debits which mirror the valuation income on the investment balances held in the non-qualified deferred compensation plan in order to adjust the liability to participants of the deferred compensation plan.
(12) Includes $4.0 million, $3.9 million and $3.7 million in the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively, and $7.9 million and $7.1 million in the six months ended June 30, 2023 and 2022, respectively, related to Amerant Mortgage, primarily consisting of salaries and employee benefits, mortgage lending costs and professional and other services fees.
Exhibit 6 - Consolidated Balance Sheets
| | | | | | | | | | | | | | | | | | | | | |
| (in thousands, except share data) | June 30, 2023 | | March 31, 2023 | | December 31, 2022 | | | | |
| | | | | | | | | |
| Assets | | | | | (audited) |
| Cash and due from banks | $ | 45,184 | | | $ | 41,489 | | | $ | 19,486 | | | | | |
| Interest earning deposits with banks | 365,673 | | | 411,747 | | | 228,955 | | | | | |
| Restricted cash | 34,204 | | | 32,541 | | | 42,160 | | | | | |
| Cash and cash equivalents | 445,061 | | | 485,777 | | | 290,601 | | | | | |
| Securities | | | | | | | | | |
| Debt securities available for sale, at fair value | 1,027,676 | | | 1,045,883 | | | 1,057,621 | | | | | |
Debt securities held to maturity, at amortized cost (estimated fair value of 209,546, 218,388 and 217,609 at June 30, 2023, March 31, 2023 and December 31, 2022, respectively) | 234,369 | | | 239,258 | | | 242,101 | | | | | |
| Trading securities | 298 | | | — | | | — | | | | | |
| Equity securities with readily determinable fair value not held for trading | 2,500 | | | — | | | 11,383 | | | | | |
| Federal Reserve Bank and Federal Home Loan Bank stock | 50,460 | | | 62,556 | | | 55,575 | | | | | |
| Securities | 1,315,303 | | | 1,347,697 | | | 1,366,680 | | | | | |
| | | | | | | | | |
| Mortgage loans held for sale, at fair value | 49,942 | | | 65,289 | | | 62,438 | | | | | |
| Loans held for investment, gross | 7,167,016 | | | 7,049,746 | | | 6,857,194 | | | | | |
| Less: Allowance for credit losses | 105,956 | | | 84,361 | | | 83,500 | | | | | |
| Loans held for investment, net | 7,061,060 | | | 6,965,385 | | | 6,773,694 | | | | | |
| Bank owned life insurance | 231,253 | | | 229,824 | | | 228,412 | | | | | |
| Premises and equipment, net | 43,714 | | | 42,380 | | | 41,772 | | | | | |
| Deferred tax assets, net | 56,779 | | | 46,112 | | | 48,703 | | | | | |
| Operating lease right-of-use assets | 116,161 | | | 119,503 | | | 139,987 | | | | | |
| Goodwill | 20,525 | | | 20,525 | | | 19,506 | | | | | |
| Accrued interest receivable and other assets (1) | 179,728 | | | 172,810 | | | 156,011 | | | | | |
| Total assets | $ | 9,519,526 | | | $ | 9,495,302 | | | $ | 9,127,804 | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | | |
| Deposits | | | | | | | | | |
| Demand | | | | | | | | | |
| Noninterest bearing | $ | 1,293,522 | | | $ | 1,360,626 | | | $ | 1,367,664 | | | | | |
| Interest bearing | 2,773,120 | | | 2,489,565 | | | 2,300,469 | | | | | |
| Savings and money market | 1,431,375 | | | 1,507,195 | | | 1,647,811 | | | | | |
| Time | 2,081,554 | | | 1,929,340 | | | 1,728,255 | | | | | |
| Total deposits | 7,579,571 | | | 7,286,726 | | | 7,044,199 | | | | | |
| Advances from the Federal Home Loan Bank | 770,000 | | | 1,052,012 | | | 906,486 | | | | | |
| Senior notes | 59,368 | | | 59,289 | | | 59,210 | | | | | |
| Subordinated notes | 29,369 | | | 29,326 | | | 29,284 | | | | | |
| Junior subordinated debentures held by trust subsidiaries | 64,178 | | | 64,178 | | | 64,178 | | | | | |
| Operating lease liabilities (2) | 119,921 | | | 122,214 | | | 140,147 | | | | | |
| Accounts payable, accrued liabilities and other liabilities (3) | 176,163 | | | 152,501 | | | 178,574 | | | | | |
| Total liabilities | 8,798,570 | | | 8,766,246 | | | 8,422,078 | | | | | |
| | | | | | | | | |
| Stockholders’ equity | | | | | | | | | |
| Class A common stock | 3,374 | | | 3,383 | | | 3,382 | | | | | |
| | | | | | | | | |
| Additional paid in capital | 195,275 | | | 194,782 | | | 194,694 | | | | | |
| | | | | | | | | |
| Retained earnings | 611,829 | | | 607,544 | | | 590,375 | | | | | |
| Accumulated other comprehensive loss | (86,926) | | | (74,319) | | | (80,635) | | | | | |
| Total stockholders' equity before noncontrolling interest | 723,552 | | | 731,390 | | | 707,816 | | | | | |
| Noncontrolling interest | (2,596) | | | (2,334) | | | (2,090) | | | | | |
| Total stockholders' equity | 720,956 | | | 729,056 | | | 705,726 | | | | | |
| Total liabilities and stockholders' equity | $ | 9,519,526 | | | $ | 9,495,302 | | | $ | 9,127,804 | | | | | |
| | | | | | | | | |
__________
(1) As of June 30, 2023, March 31, 2023 and December 31, 2022, include derivative assets with a total fair value of $75.8 million, $60.8 million and $78.3 million, respectively.
(2) Consists of total long-term lease liabilities. Total short-term lease liabilities are included in other liabilities.
(3) As of June 30, 2023, March 31, 2023 and December 31, 2022, include derivatives liabilities with a total fair value of $74.5 million, $59.5 million and $77.2 million, respectively.
Exhibit 7 - Loans
Loans by Type - Held For Investment
The loan portfolio held for investment consists of the following loan classes:
| | | | | | | | | | | | | | | | | | | | | |
| (in thousands) | June 30,
2023 | | March 31,
2023 | | December 31,
2022 | | | | |
| Real estate loans | | | | | | | | | |
| Commercial real estate | | | | | | | | | |
| Non-owner occupied | $ | 1,645,224 | | | $ | 1,630,451 | | | $ | 1,615,716 | | | | | |
| Multi-family residential | 764,712 | | | 796,125 | | | 820,023 | | | | | |
| Land development and construction loans | 314,010 | | | 303,268 | | | 273,174 | | | | | |
| 2,723,946 | | | 2,729,844 | | | 2,708,913 | | | | | |
| Single-family residential | 1,285,857 | | | 1,189,045 | | | 1,102,845 | | | | | |
| Owner occupied | 1,063,240 | | | 1,069,491 | | | 1,046,450 | | | | | |
| 5,073,043 | | | 4,988,380 | | | 4,858,208 | | | | | |
| Commercial loans (1) | 1,577,209 | | | 1,497,649 | | | 1,381,234 | | | | | |
| Loans to financial institutions and acceptances | 13,332 | | | 13,312 | | | 13,292 | | | | | |
| Consumer loans and overdrafts (2) | 503,432 | | | 550,405 | | | 604,460 | | | | | |
| Total loans | $ | 7,167,016 | | | $ | 7,049,746 | | | $ | 6,857,194 | | | | | |
| | | | | | | | | |
__________________
(1) As of June 30, 2023, March 31, 2023 and December 31, 2022, includes approximately $47.7 million, $46.7 million and $45.3 million, respectively, in commercial loans and leases originated under a white-label equipment financing solution launched in the second quarter of 2022.
(2) As of June 30, 2023, March 31, 2023 and December 31, 2022, includes $312.3 million, $372.2 million and $433.3 million, respectively, in consumer loans purchased under indirect lending programs. In addition, as of June 30, 2023, March 31, 2023 and December 31, 2022, includes $61.8 million, $62.1 million and $43.8 million, respectively, in consumer loans originated under a white-label program.
Loans by Type - Held For Sale
The loan portfolio held for sale consists of the following loan classes:
| | | | | | | | | | | | | | | | | | | | | |
| (in thousands) | June 30,
2023 | | March 31,
2023 | | | | December 31,
2023 | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | (audited) | | |
| Loans held for sale at fair value | | | | | | | | | |
| Land development and construction loans (1) | 3,726 | | | 15,527 | | | | | 9,424 | | | |
| Single-family residential (2) | 46,216 | | | 49,762 | | | | | 53,014 | | | |
| | | | | | | | | |
| Total loans held for sale at fair value (3)(4) | $ | 49,942 | | | $ | 65,289 | | | | | $ | 62,438 | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
__________________
(1) In the second quarter of 2023, the Company transferred approximately $13 million in land development and construction loans held for sale to the loans held for investment category.
(2) In the second quarter of 2023, the Company transferred approximately $28 million in single-family residential loans held for sale to the loans held for investment category.
(3) Loans held for sale in connection with Amerant Mortgage ongoing business.
(4) Remained current and in accrual status at each of the periods shown.
Non-Performing Assets
This table shows a summary of our non-performing assets by loan class, which includes non-performing loans, other real estate owned, or OREO, and other repossessed assets at the dates presented. Non-performing loans consist of (i) nonaccrual loans, and (ii) accruing loans 90 days or more contractually past due as to interest or principal.
| | | | | | | | | | | | | | | | | | | | | |
| (in thousands) | June 30,
2023 | | March 31,
2023 | | December 31,
2022 | | | | |
Non-Accrual Loans(1) | | | | | (audited) | | | | |
| Real Estate Loans | | | | | | | | | |
| Commercial real estate (CRE) | | | | | | | | | |
| Non-owner occupied | $ | 1,696 | | | $ | — | | | $ | 20,057 | | | | | |
| Multi-family residential | 24,306 | | | — | | | — | | | | | |
| 26,002 | | | — | | | 20,057 | | | | | |
| Single-family residential | 1,681 | | | 1,367 | | | 1,526 | | | | | |
| Owner occupied | 6,890 | | | 7,118 | | | 6,270 | | | | | |
| 34,573 | | | 8,485 | | | 27,853 | | | | | |
Commercial loans (2) | 12,241 | | | 13,643 | | | 9,271 | | | | | |
Consumer loans and overdrafts (3) | 1 | | | 1 | | | 4 | | | | | |
| Total Non-Accrual Loans | $ | 46,815 | | | $ | 22,129 | | | $ | 37,128 | | | | | |
| | | | | | | | | |
Past Due Accruing Loans(4) | | | | | | | | | |
| Real Estate Loans | | | | | | | | | |
| Commercial real estate (CRE) | | | | | | | | | |
| | | | | | | | | |
| Single-family residential | 302 | | | — | | | 253 | | | | | |
| | | | | | | | | |
| Commercial | — | | | — | | | 183 | | | | | |
| Consumer loans and overdrafts | 78 | | | 53 | | | 35 | | | | | |
| Total Past Due Accruing Loans | $ | 380 | | | $ | 53 | | | $ | 471 | | | | | |
| Total Non-Performing Loans | 47,195 | | | 22,182 | | | 37,599 | | | | | |
| OREO and other repossessed assets | 20,181 | | | 26,534 | | | — | | | | | |
| Total Non-Performing Assets | $ | 67,376 | | | $ | 48,716 | | | $ | 37,599 | | | | | |
| | | | | | | | | |
__________________
(1) Prior to the first quarter of 2023, included loan modifications that met the definition of troubled debt restructurings, or TDR, which may be performing in accordance with their modified loan terms.
(2) In the second quarter of 2023, we collected $2.8 million in full satisfaction of a commercial loan relationship in nonaccrual status and classified as Substandard at March 31, 2023.
(3) In the fourth quarter of 2022, the Company changed its charge-off policy for unsecured consumer loans from 120 to 90 days past due. This change resulted in an additional $3.4 million in charge-offs for unsecured consumer loans in the fourth quarter of 2022.
(4) Loans past due 90 days or more but still accruing.
Loans by Credit Quality Indicators
This table shows the Company’s loans by credit quality indicators. The Company has not purchased credit-impaired loans.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| June 30, 2023 | | March 31, 2023 | | December 31, 2022 | | |
| | | | | | | | (audited) | | |
| (in thousands) | Special Mention | Substandard | Doubtful | Total (1) | | Special Mention | Substandard | Doubtful | Total (1) | | Special Mention | Substandard | Doubtful | Total (1) | | | | | |
| Real Estate Loans | | | | | | | | | | | | | | | | | | | |
Commercial Real
Estate (CRE) | | | | | | | | | | | | | | | | | | | |
Non-owner
occupied | $ | 8,301 | | $ | 1,753 | | $ | — | | $ | 10,054 | | | $ | 8,335 | | $ | — | | $ | — | | $ | 8,335 | | | $ | 8,378 | | $ | 20,113 | | $ | — | | $ | 28,491 | | | | | | |
| Multi-family residential | — | | 24,306 | | — | | 24,306 | | | 24,348 | | — | | — | | 24,348 | | | — | | — | | — | | — | | | | | | |
Land development
and
construction
loans | 6,497 | | — | | — | | 6,497 | | | — | | — | | — | | — | | | — | | — | | — | | — | | | | | | |
| 14,798 | | 26,059 | | — | | 40,857 | | | 32,683 | | — | | — | | 32,683 | | | 8,378 | | 20,113 | | — | | 28,491 | | | | | | |
| Single-family residential | — | | 2,154 | | — | | 2,154 | | | — | | 1,514 | | — | | 1,514 | | | — | | 1,930 | | — | | 1,930 | | | | | | |
| Owner occupied | 2,236 | | 6,972 | | — | | 9,208 | | | — | | 7,202 | | — | | 7,202 | | | — | | 6,356 | | — | | 6,356 | | | | | | |
| 17,034 | | 35,185 | | — | | 52,219 | | | 32,683 | | 8,716 | | — | | 41,399 | | | 8,378 | | 28,399 | | — | | 36,777 | | | | | | |
| Commercial loans (2) | 13,029 | | 13,312 | | 3 | | 26,344 | | | 3,240 | | 14,891 | | 3 | | 18,134 | | | 1,749 | | 10,446 | | 3 | | 12,198 | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Consumer loans and
overdrafts | — | | 70 | | — | | 70 | | | — | | 1 | | — | | 1 | | | — | | 230 | | — | | 230 | | | | | | |
| Totals | $ | 30,063 | | $ | 48,567 | | $ | 3 | | $ | 78,633 | | | $ | 35,923 | | $ | 23,608 | | $ | 3 | | $ | 59,534 | | | $ | 10,127 | | $ | 39,075 | | $ | 3 | | $ | 49,205 | | | | | | |
| | | | | | | | | | | | | | | | | | | |
__________
(1) There were no loans categorized as “loss” as of the dates presented.
(2) In the second quarter of 2023, we collected $2.8 million in full satisfaction of a commercial loan relationship in nonaccrual status and classified as Substandard at March 31, 2023.
Exhibit 8 - Deposits by Country of Domicile
This table shows the Company’s deposits by country of domicile of the depositor as of the dates presented.
| | | | | | | | | | | | | | | | | | | | | |
| (in thousands) | June 30, 2023 | | March 31, 2023 | | December 31, 2022 | | | | |
| |
| | | | | (audited) | | | | |
| Domestic | $ | 5,113,604 | | | $ | 4,891,873 | | | $ | 4,620,906 | | | | | |
| Foreign: | | | | | | | | | |
| Venezuela | 1,912,994 | | | 1,897,199 | | | 1,911,551 | | | | | |
| Others | 552,973 | | | 497,654 | | | 511,742 | | | | | |
| Total foreign | 2,465,967 | | | 2,394,853 | | | 2,423,293 | | | | | |
| Total deposits | $ | 7,579,571 | | | $ | 7,286,726 | | | $ | 7,044,199 | | | | | |
